Tag Archive: real estate sector

India Ratings: Demand not expected to improve for real estate sector in FY17

India Ratings and Research (Ind-Ra) has revised its outlook on the real estate sector to negative for FY17 from negative to stable, based on the expectation that property demand will not revive during the year. This will result in a continued fall in unit sales and revenue, and thus lower cash flows and worse credit metrics in FY17. Hence, Ind-Ra has also revised the rating outlook on sector companies to negative from stable. Revival in property demand would depend on meaningful reduction in prices or significant improvement in economic growth resulting in positive customer sentiment. Revival is unlikely until FYE17, as property prices will remain high; Ind-Ra estimates GDP growth to improve to 7.9% in FY17 (FY16: 7.4%). Companies have resorted to refinancing of debt through higher-cost funding from non-banking finance companies/private investors. This extends maturity and reduces…
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